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The Egyptian real estate leaders: how well are they doing?

The business of the Egyptian real estate market has been flourishing despite political turmoil. In this feature, Daily News Egypt compared the relative performances of the real estate companies in the past year with attention to their net profits. TMG Talaat Mostafa Group’s consolidated net profits during the first nine months of the year totaled …

The business of the Egyptian real estate market has been flourishing despite political turmoil. In this feature, Daily News Egypt compared the relative performances of the real estate companies in the past year with attention to their net profits.

TMG

Talaat Mostafa Group’s consolidated net profits during the first nine months of the year totaled EGP 531.4m, an 8.9% increase compared to the EGP 487.9m registered in the same period in the preceding year.

TMG declared EGP 5.17bn in total revenue between January and September 2015, exceeding the company’s projections. The real estate company forecast that revenue would reach EGP 4.58bn.

The group posted total sales of 5.17bn in the first nine months of 2015, exceeding the forecasted EGP 4.68bn.

TMG is currently implementing the construction of the Four Seasons Sharm El-Sheikh which will be completed in early 2019. The expansion project includes adding 99 hotel rooms, a golf course, villas, a meeting room, restaurants, and swimming pools.

As for the unconsolidated net profits, the company was able to overcome an EGP 324.5m net loss during the first months of 2014 to post an EGP 15.8 net profit during the same period of 2015.

The company declared unconsolidated revenue of EGP 25.69m during the first nine months of 2015. The aforementioned figure was notably lower, however, than the revenues recorded during the first nine month of 2014, which totaled EGP 45.24m.

During the third quarter of 2015, TMG’s unconsolidated revenues reached EGP 5.55m while its net profits registered EGP 2.81m.

TMG owns a land bank of 50m sqm and the group became a joint-stock company in 2007.

PHD

Palm Hills Development (PHD) recorded EGP 1.06bn in consolidated net profits in 2015, a 185% increase compared to the previous year’s profits, which totalled EGP 373.3m. The company’s unconsolidated net profits amounted to EGP 775.7m in 2015, compared to EGP 280.9m in 2014.

The real estate company registered EGP 203.5m in net profits during the past year’s fourth quarter. This is a 128% increase compared to the EGP 89m during the same quarter the preceding year.

In July, PHD and Madinet Nasr Housing and Development (MNHD) signed an agreement to develop a residential community in East Cairo. PHD is developing the project on 433,643 sqm of land. The company said the project is expected to generate revenue between EGP 4.6bn and EGP 5.5bn of which it is entitled to 64%.

In November, the company agreed to cooperate with Reacap Financial Investments (REACAP), a subsidiary of Svreico Real Estate Investments, to develop a residential and commercial area in 6 October’s Smart Village. The project’s estimated revenues will be between EGP 700m and 800m. PHD owns 51% of the project.

SODIC

Sixth of October for Development and Investment (SODIC) net profits amounted to EGP 321.3m in 2015, a 108.23% increase from the EGP 154.3M profits recorded in 2014. In the fourth quarter of the year, the company’s net profits jumped by 99.1% to reach EGP 88.8m, compared to EGP 44.6m recorded in Q4 2013.

SODIC recorded revenues of EGP 1.47bn and its gross profit margin amounted to a 41% growth compared to the EGP 1.37bn recorded during the same period a year earlier.

The company’s sales during 2015 reached EGP 4.4bn. This is a 43% year over year growth compared to the past year. The company spent EGP 1.8bn on construction and land payments.

Last month, SODIC and Heliopolis Development Housing (Heliopolis Housing) signed a co-development contract for 655 acres in New Heliopolis, East Cairo.

The signed contract grant SODIC control of 70% of the revenue generated from residential units while Heliopolis Housing will receive the remaining 30%. SODIC will be granted 69.8% of the commercial and retail revenues while Heliopolis Housing will control the remaining 30.2%.

Emaar Misr

Emaar Misr’s profits increased by 104.5% compared to 2014. The company recorded a net profit of EGP 854.7m, compared to EGP 417.9m a year earlier. The company recorded revenue of EGP 3.2bn, a 25.9% increase compared to the EGP 2.6bn recorded in 2014.

The company reported net sales of EGP 3.91bn in the first half of 2015. During the time, the company attributed the increase to an augmentation in sales at two of its projects: Mivida in new Cairo posted a 45% increase in sales and Marassi on the North Coast posted a 40% increase.

MNHD reported net revenue of EGP 91.1m in the fourth quarter of 2015 and gross revenue of EGP 748.4m over the whole year.

The company plans to begin implementation of the second phase of Nasr City’s Primera project during the current quarter, with an initial investment of EGP 70m. The construction phase is expected to take two years, and sales will begin during Q1 of 2016.

MNHD has completed the first phase of construction at the Primera Compound, completing the development of 400 residential units that cost approximately EGP 250m, an average of EGP 700,000 per unit.

Heliopolis Housing

Heliopolis Company for Housing and Development’s profits amounted to EGP 258.2m during the first half of fiscal year (FY) 2015/2016. This is a 189% increase compared to the EGP 89.3m recorded during the same period in FY 2014/2015.

In March, the company said that it will invest EGP 500m for residential and land development during FY 2016/2017.

The overall review

Pharos Holding for Financial Investments recently released a report wherein it claimed that financial indicators suggest that the sale of properties marketed to high-income earners will slow in the coming period. However, if the triple digits profit year over year increases do not support these claims.